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Small Businesses Adopt Facebook Commerce

Almost 40% of small businesses that sell on Facebook say it is their sole sales channel

March 29, 2012

Despite a handful of big-box retailers shuttering their Facebook storefronts, many small businesses are viewing Facebook favorably as a commerce destination.

According to Payvment, a social commerce platform provider, more than 100,000 sellers have Facebook stores. And according to a survey of Payvment’s own small business customer base, 37% of Facebook store operators were using the site as their sole sales channel.

The same survey showed 61% of respondents liked Facebook for the ability to promote products via social media marketing. Moreover, 60% of respondents told Payvment they liked that customers don’t have to leave Facebook to make a transaction. Roughly half of respondents said they liked that it was easy to set up and maintain a Facebook storefront.

Favorite Aspects of Selling Their Goods on Facebook According to Small-Business Owners Worldwide, Feb 2012 (% of respondents)

2011 seemed to be a year ripe for experimentation with Facebook commerce. Retailers such as Gamestop and JCPenney and fashion brands like Oscar de la Renta and Diane von Furstenberg established Facebook stores that enabled select purchases via the social network. Oscar de la Renta, for example, created a Shop Exclusives tab that offered Facebook-only items, such as a perfume ring and an exclusive bangle. Both Gamestop and JCPenney closed their stores in early 2012, drawing speculation about low returns for F-commerce efforts.

No matter the size of the business, consumers still express hesitation when it comes to making purchases on social networks. According to JWT Intelligence, privacy was shoppers’ main concern when asked about F-commerce in June 2011. Similar percentages of consumers questioned whether Facebook was secure enough to be a safe purchase platform.

US Internet Users' Privacy Concerns Related to Facebook Commerce, by Generation, June 2011 (% of respondents in each group)

Depite consumers' concerns about F-commerce, small businesses find the channel appealing because it lets them “leverage their scrappiness,” Joelle Musante, Payvment co-founder and chief brand officer, told eMarketer in a December 2011 interview.

“It would cost a lot more money to drive somebody to a dot-com than it does to a place where there’s already 800 million people,” she said.

Of course, many small businesses surveyed by Payvment weren't entirely reliant on Facebook for their online sales. Sixty-three percent said they also sold products through their website. Smaller percentages said they used eBay, Etsy or Amazon.

Other Sales Channels Employed by Small-Business Owners Worldwide Who Sell Their Goods on Facebook, Feb 2012 (% of respondents)

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Check out today’s other articles, “Digital Drives US Local Ad Spending Growth” and “Youku, Tudou Merger’s Effect May Be Mostly Hype.”

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